government grants for small businesses start up

Now I want you to do a little exercise for me here it come I have given you six transactions for each tell me which asset is affected and then tell me if the asset increased or decreased as a result of the transaction stop this now and do this exercise once you are done we’ll start the presentation again like I’m here our dancers have a look do this correspond with your answers let me go through each one the first a company paid $50,000 for advertising which asset is affected its cash because the company paid money and cash decrease second the company bought eighty five thousand worth of equipment on account which asset was affected equipment and it increased third the company furnished its officers by purchasing assets with twenty five thousand for cash which asset affected well to furniture and it increased and cash and it decreased the next one

If you got this right then you are very good in accounting the company opened the store which acid affected the answer is no asset account was affected because opening a store is not a transaction for accounting purposes the answer is nothing fifth purchase 30,000 inventory on account the asset that’s affected is inventory it increases by thirty thousand the last one the answer is two types of assets were impacted inventory and cash inventory increased and cash decreased are you comfortable up to now did you get all of these correct if so you could be potential future accountants now let’s proceed liabilities liabilities are everything owed by a business to outsiders these Outsiders are called creditors so liabilities are bad for our business.

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